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6. NEW BUSINESS <br />g. Contilnued <br />Mr. ohnson: We already have cut back. We used to try to get storm <br />windows throughout the structure, and now we are finding we can only <br />put them in the kitchen and bathroom, So we are trying to cut down, <br />but as we cut down, prices are rising. <br />The hair: Well, rather than'go the Cadillac route, we better start <br />thinling about the Toyota . <br />Mr. ohnson: We will have the cost estimators look into further re- <br />sear h on material used for the walls. Maybe we can come up with <br />something better than Marlite. The last time we checked it, they <br />said it was just as cheap (as dry wall), but we will look again. <br />The hair: They may tell you that, but by golly, there is a world of <br />Jiff rence in material costs. <br />Mr. �rownell: I think the problem is the cost of labor. <br />Mr. Butler: I think you commented on this some time ago, but, would <br />it create too many problems to break these contracts down per home -- <br />so that we are not getting into the sub - contracting? In other.words, <br />if WE, have electrical work, we would simply take bids from electrical <br />contractors on these? <br />Mr. righton: Ken and I have been working on that for six months or <br />a year and the problem essentially is one of bonding. Say we put <br />together maybe six houses and put just the electrical work on one <br />contract; just the plumbing on another contract; and the carpentry <br />and miscellaneous work on another. We would theoretically have three <br />or four contracts for a group of five or six houses. The problem is <br />the sub-contractors are unable to get bond -- performance bonds -- <br />for this work, because their capital isn't that large and they don't <br />have enough assets to liquidate . . . <br />Mr. Butler: Would it be possible to net some of the larger specialty <br />contractors? <br />Mr. righton: That's one aspect. The other is, we are trying to see <br />what we can do about getting the bond requirements down. I have re <br />ques ed some assistance from the Controller':s office and the City <br />Atto ney, in terms of information only, on what we can do about it. <br />I ho )e to get an answer sometime within the next month. You realize <br />it is a problem. We are losing contractors because the bonding re- <br />quirements are going up, and it's not because the smaller contractors <br />are iiot complying, but the larger contractors (on a nationwide aspect) <br />are not complying with many contracts. So the bonding companies have <br />to raise their rates and raise their requirements. <br />-11- <br />